2014’S TOP ENERGY QUESTIONS — PART 1: It’s a new year, but policy disputes from 2013 will continue to drive the agenda in the coming months. Join ME for a look at what’s ahead, with the first five today and the second half tomorrow morning.

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1) What effect will EPA’s climate regulations have? EPA is supposed to finalize its greenhouse gas emissions rule for future power plants this year (though EPA has yet to publish the draft rule in the Federal Register, meaning the public comment period has yet to begin) — and by June, the agency is scheduled to release its draft regulation for emissions from existing power plants. Will the administration stick to its timeline on those major rules? And will the final rule for future plants be watered down, or beefed up, before it is finalized?

— But wait, there’s more: The courts are playing a major role in reviewing EPA regulations at the moment. In December the Supreme Court heard arguments in a challenge to the Cross-State Air Pollution Rule, and in late February the justices hear a limited challenge to EPA’s authority to regulate greenhouse gases. Ruling in those cases will come by June. And there’s a potential new case: Will the Supreme Court take up Mingo Logan — a controversial case over a revoked mountaintop mining permit that many industries worry could hold major precedent for EPA’s authority over ubiquitous Army Corps of Engineers permits?

— First things first: There are some big EPA deadlines coming this month that are worth keeping an eye on. EPA is due by a several-times-extended, court-agreed deadline to finalize its new technology standards for cooling water towers at existing power plants by Jan. 14. And the agency has to tell an appeals court what it exactly it plans to do about its years-delayed proposed waste regulations governing coal-ash — the byproduct of burning coal at power plants — by Jan. 29.

2) What happens to Keystone XL? Pros will remember Keystone XL also made ME’s list in 2013… and 2012. All signs point to the State Department releasing its final environmental report on the pipeline by the end of March — but there’s no guarantee on that timeline, and even then there are multiple more steps to take before a final permit could be issued. In the meantime, Keystone XL remains a potent talking point for both sides.

3) What does John Podesta do at the White House? Podesta — who will work on climate and health care issues, among others, but not Keystone XL, according to the White House — is coming on board for one year as a special adviser to the president. For greens, that’s good news; the White House recently lost several of its top in-house energy and environment experts, including Heather Zichal at the end of last year and Nancy Sutley next month. What remains unclear is what exactly Podesta will be doing on climate issues.

4) Will the Senate go Republican? Probably the biggest political question of the year, the Senate’s makeup come 2015 will have a major effect on what happens in the energy world (particularly with the House almost certain to remain in Republican hands). Max Baucus’s impending departure to be ambassador to China has moved up the timetable on the chairmanship musical chairs that would likely see Ron Wyden move to head the Finance Committee and leave Mary Landrieu to take the Energy and Natural Resources Committee’s gavel. That could help her reelection efforts in oil-and-gas-dependent Louisiana — but if Republicans manage to take the overall Senate, Landrieu could find herself playing ranking member. And a Republican Congress would make things difficult for the Obama administration’s energy agenda (among other things).

5) Can Congress do tax reform? Depending on whom you ask, Congress is either sure to tackle tax reform this year, or the effort is completely dead. With Baucus’s departure, the timetable for acting on tax reform is looking even shakier than before. One of the big questions now is where that leaves a host of renewable energy, alternative fuel and energy efficiency tax credits that expired when the ball dropped two nights ago. Senate Democrats made a quick attempt to do tax extenders before the break, but a serious effort will likely have to come within the next few months. That leaves lawmakers searching for a must-pass vehicle to latch onto, since stand-along tax extenders have little chance of clearing the House.

CHECK BACK TOMORROW for the second half of the list.

DON’T TAKE ME’S WORD FOR IT: Andrew Restuccia asked several major energy and environmental players — including Jack Gerard, Bill McKibben, Marty Durbin and Rhone Resch — what the issues they’ll be watching in 2014: http://politico.pro/KiVSHv

CEQ COULD GET OVERHAUL UNDER PODESTA: A largely forgotten White House environment policy shop may get souped up in 2014 as federal agencies move to implement President Barack Obama’s climate change strategy. That office, the White House Council on Environmental Quality, has been a core player in recent administrations’ environmental efforts, but has been mostly an afterthought under President Barack Obama. But incoming White House counsel John Podesta may shake things up and give CEQ a more prominent role. Darren Goode has the story: http://politico.pro/JvIVtM

N.D. OIL TRAIN ACCIDENT RAISES MORE KXL QUESTIONS: Via Bloomberg: “The derailment and fire that led to the evacuation of a North Dakota town has renewed the debate over whether it’s safer to ship oil by rail or pipeline as the U.S. completes a review of the Keystone XL project. … While climate change has been the focus of the fight over TransCanada Corp.’s (TRP) proposed Keystone XL pipeline from Canada to the U.S. Gulf Coast, a subset in the debate has been the relative safety of pipes versus trains. The U.S. State Department, reviewing the $5.4 billion project because it would cross the U.S. border, is weighing whether the pipeline would be in the national interest.” http://bloom.bg/1a1tvHS

MAKING WAVES IN THE SOLAR INDUSTRY: On Dec. 31, SolarWorld officially petitioned the Commerce Department and the U.S. International Trade Commission to close what the manufacturer calls a truck-sized loophole in the tariffs the government applied to crystalline silicon solar imports from China last year. Though the tariffs were substantial, SolarWorld says China has been skirting them by assembling and exporting to the U.S. solar panels out of solar cells (the individual blocks that make up panels) manufactured in other countries, something not addressed in the 2012 tariffs.

— “As a result, the remedy afforded by the first AD/CVD cases was substantially weakened, allowing increasing volumes of subject product to continue shipping large quantities of dumped and subsidized product into the U.S. market,” SolarWorld writes in its petition. “At a time when it should have been benefitting from healthy demand, the domestic industry suffered from significant and growing operating losses.” Volume 1 of SolarWorld’s petition (the full petition, available via the ITC’s website, is made up of 333 separate files) is here: http://politico.pro/1l3xTKE

SEIA opposes action: The Solar Energy Industries Association, which lobbied for SolarWorld to drop its first petition for tariffs in favor of a mediated solution between the U.S. and China, condemned the new petition. “Trade litigation is a blunt instrument and, alone, incapable of resolving the complex competitiveness issues that exist between the U.S. and Chinese solar industries,” SEIA President and CEO Rhone Resch said. “It’s time to end this conflict and negotiations must play a role.”

SPEAKING OF SOLAR — WHENCE ROOFTOP SOLAR? The renewable energy world is celebrating rapid growth in the residential rooftop solar market — but its success is drawing new opposition from power companies and groups backed by the conservative Koch brothers. The number of installations is rising, costs to consumers are dropping and federal subsidies are largely secure for the next few years, but some utilities and conservative groups are launching an effort to roll back solar incentives in many states. Your morning host has more: http://politico.pro/1co4J0V

EPA ACTED CORRECTLY IN RANGE RESOURCES ORDER TO STOP DRILLING — IG: EPA's 2010 emergency order halting some of Range Resources’ natural gas drilling in Texas after detecting methane — a contentious move that was challenged in court and became a rallying point for EPA critics before it was withdrawn in 2012 — was done properly under the Safe Drinking Water Act, according to an EPA inspector general report released on Christmas Eve. The stop order and “subsequent enforcement actions conformed to agency guidelines, regulations and policy,” the IG report says. “The information that the EPA had in its possession was sufficient for it to conclude that the gas production well was the most likely contributor to the contamination of the aquifer.” The report also flags quality assurance concerns over a sampling program conducted by Range Resources after the order was lifted. The IG investigation was at the request of Sen. Jim Inhofe and five other senators. Report: http://1.usa.gov/1gnz9ph

CLOCK TICKING FOR DOE TO REQUEST EN BANC REHEARING ON NUKE WASTE FEE: The Energy Department and its lawyers have until the end of tomorrow to decide whether the agency wants to challenge a November decision by the Court of Appeals for the D.C. Circuit to zero out the nuclear waste fee. Tomorrow is the deadline to request an en banc rehearing. But the agency’s odds are pretty slim. Not only did the three-judge panel hearing the nuclear waste fee case decided against DOE unanimously and rebuff the agency’s request for more time to decide its next move, the court also agreed to truncate the timetable for zeroing out the fee. DOE has to submit a proposal to Congress changing the fee, which wouldn’t take effect until 90 legislative days have passed.

DOE WON’T REVIEW SOCIAL COST OF CARBON IN MICROWAVE RULE: DOE this week denied a petition by the Landmark Legal Foundation to excise the portion of a microwave energy conservation rule that gained notoriety for also introducing changes to the “social cost of carbon” calculations — changes that could make it easier to justify a vast number of other climate and environmental rules. “In the microwave oven rule, the SCC analysis did not affect DOE's decision regarding the standards … because the estimated benefits to consumers of the standard exceeded the costs of the standard, even without considering the SCC values,” DOE wrote in a Tuesday Federal Register notice: http://1.usa.gov/1cmn6qx

QUICK HITS

— The U.S. Court of Appeals for the D.C. Circuit upheld Interior's plan to lease several tracts in Wyoming's Powder River Basin for coal mining, over the objections of environmental groups. Bloomberg: http://bloom.bg/1gnztnQ

— 2014 could bring a small dip in gasoline prices due to more domestic oil production and increased refining capacity, AAA says. Los Angeles Times: http://lat.ms/JvqxBt

— Alaskans will vote this August on a ballot initiative requiring legislative approval for large-scale mining projects in Bristol Bay. AP: http://bit.ly/KkGbj0

CORRECTION: A previous version of Morning Energy misidentified the deadline for DOE to file a rehearing request with the Court of Appeals for the D.C. Circuit.

** A message from Vet Voice Foundation: Tens of thousands of service members and veterans rely on public lands to hunt, fish, camp and heal from the wounds of war. These lands are part of the American heritage we fought for. As a new President and Congress look to rebuild America's infrastructure, we call on them to make an equal investment in maintaining our public lands and parks for our service members and all Americans. Support for our veterans must extend to investing in and protecting America’s natural heritage, for our children and grandchildren. www.VetVoiceFoundation.org **

Authors:

About The Author

Alex Guillén is an energy reporter for POLITICO Pro, where he covers EPA, regulations and coal, as well as lobbying and campaign finance in the energy realm. He previously wrote the Morning Energy newsletter. He graduated from the College of William and Mary in Williamsburg, Va., with a degree in anthropology and English. He is an avid reader and TV binger. The Delawarean, thrilled that there are finally Capriotti’s outposts in Washington, lives in Alexandria, Va.